Consortium Blockchain

Consortium blockchains can exist between public and private chains and contain elements of both types. The most obvious difference between such chains compared to others may be the level of consensus. Instead of an open system where anyone can verify blocks or a closed system where block producers are appointed by a single unit, there are few strengths working as validators in consortium chains. Therefore, it is positioned between public and private chains.

Features of Consortium Blockchain (Federated Blockchain)

The rules of the system can be bent. For example, the visibility of the chain can be limited to validators, the chain can only be viewed by authorized persons or by anyone. Changes can be made quickly if validators agree.

A consortium blockchain can be most useful when multiple organizations need a common space to operate in the same industry and share knowledge. Organizations can be beneficial as participants can share their knowledge with other participants in the industry.

Public vs Private vs Consortium Blockchain

Public, private and consortium blockchains are not in competition with each other. They are just different technologies from each other:

• Public chains excel at censorship resistance but must sacrifice speed and efficiency. This is the type of chain that excels at ensuring security while transactions are negotiated.
• A private blockchain can put the speed at the forefront because it doesn’t have to worry about central points of failure as much as public blockchains. Such blockchains are ideally used where an individual or organization needs to stay in control and keep the information confidential.
• Consortium blockchains partially reduce counterparty risk in private blockchains by eliminating centralized control and operating more efficiently than private blockchains due to the smaller number of nodes. Consortia usually appeal to organizations that want to seamlessly communicate with each other.

Learn more about public and private blockchains.